Kinks and Gains from Credit Cycles
Publikation: Working paper
Credit-market imperfections are at the centre stage of several theories of business fluctuations. Since a lot of research seeks to address the welfare consequences of stabilization policies, we revisit the fundamental question of quantifying the cost of business cycles in a model where household borrowing is subject to a collateral constraint. Business cycles occasionally change the credit-market conditions, making households temporarily unconstrained and better off. This effect can dominate the conventional losses from uncertainty, thus making fluctuations welfare-dominate certainty.
Originalsprog | Engelsk |
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Antal sider | 27 |
Status | Udgivet - 29 jul. 2019 |
Navn | CEPR Discussion Paper Series |
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Nummer | DP13795 |
- Det Samfundsvidenskabelige Fakultet
Forskningsområder
Links
- https://ssrn.com/abstract=3428315
Forlagets udgivne version
ID: 222257122